STIRLING J. the will to the Mutual Life Assurance Society, who entered 1896 into possession as mortgagees. CHANDLER V. BRADLEY. Part of the freehold property at Epsom consisted of a dwelling-house known as "The Retreat," with a paddock and garden, containing altogether 3 roods 18 perches. This adjoined other property (not comprised in the testatrix's will), where the defendant carried on business as a brewer. The house became vacant about Midsummer, 1891, and was left in a bad state of repair. The insurance company placed it in the hands of some house agents at Epsom, to whom the defendant, by letter dated February 8, 1892, proposed either to become the purchaser or to take it for seven years certain, provided it was put in thorough repair. This led to negotiations between the defendant and Mr. Manley, the actuary of the insurance company. On March 18, 1892, Mr. Manley wrote to the defendant as follows: "Dear Sir, "The Retreat. "I am very sorry to think that you should have reason to feel annoyed at any want of courtesy on the part of our agent. I understood from Mr. Wrightman that he had explained to you that as we shall have to give up possession on the death of Mr. Jas. Chandler, Senr., we are not in a position to treat for the sale of the property, nor do we feel justified in spending any large sum of money in putting it in repair, but that we could grant a lease for 7 years at a very moderate rental to any one who would undertake to put it in repair." After some further correspondence Mr. Manley again wrote to the defendant on March 23, 1892 : "I have consulted with our solicitor to-day and find that our position is a very peculiar one. Individually we are unable to grant a lease for a longer time than the life of Mr. Jas. Chandler, Senr., but that if Mr. Chandler will join we can jointly grant you a lease. Could you approach Mr. Chandler with the view of getting him to join?" On March 24, 1892, the defendant wrote to Mr. Manley:"Mr. Jas. Chandler is in London at 211, High Holborn; but I can see Mr. Frank Chandler. I expect the only way to induce Mr. Chandler to join with you in granting a lease would STIRLINGJ. be by means of a consideration, as I know that would be 1896 welcome. Would you be prepared to do this if I come to terms with him?" On the same day Mr. Manley replied: "I thank you for the address of Mr. Jas. Chandler, Senr., and I will endeavour to induce him to grant a lease. I cannot offer him a consideration as that might possibly vitiate the lease." Ultimately Mr. Chandler consented to join in granting a lease, and the mode in which his consent was obtained was thus stated by the defendant in his evidence in chief: "I spoke to Mr. Frank Chandler to ask his father if he would sign the lease. He came a morning or two after and said his father was quite willing to sign the lease; but he thought I ought to give him something for himself. . . . I asked Frank Chandler what his father wanted: he said his father thought he ought to have 20 guineas: I said rather than go without the lease I will give him 20 guineas." A lease was afterwards prepared by the solicitors for the insurance company and sent to the defendant, who read it through and returned it. The lease was then engrossed and sent to the defendant, who gave it to Mr. Frank Chandler to procure his father's execution of it. Mr. F. Chandler brought it to the defendant executed; and he thereupon gave him a cheque for 217. payable to bearer. The cheque was handed to James Chandler, who cashed it and applied the money to his own use. The lease was dated April 27, 1892, and purported to be granted by the insurance company at the request of James Chandler, and by James Chandler "under and by virtue of the Settled Land Act, 1882, and as tenant for life under the will of Elizabeth Chandler " for a term of seven years from June 24, 1892, in consideration of the rent thereby reserved and the covenants on the part of the lessee therein contained. The rent reserved was 251., and one of the covenants on the part of the lessee was within six calendar months from June 24, 1892, to lay out and expend the sum of 100l. in executing to the satisfaction of the surveyor of the insurance company repairs and improvements to the demised premises, including certain CHANDLER v. BRADLEY. 1896 CHANDLER V. STIRLING J. repairs and improvements specified in a schedule to the lease. In pursuance of this covenant repairs and improvements were in fact executed to an amount of over 2001. The defendant and Mr. Manley swore that the letting was on the best terms that could be obtained; and there was no evidence given that a higher rent could have been obtained from any person other than the defendant. BRADLEY. In 1883 two persons were appointed trustees of the will of the testatrix for the purposes of the Settled Land Act. One only of these was still living: he was called as a witness, and stated that he never heard of the payment of twenty guineas to the tenant for life. It was admitted that some at least of the children of the testatrix did not hear of it. The question was whether under these circumstances the lease was good. Grosvenor Woods, Q.C., and Dighton N. Pollock, for the plaintiffs. Apart from the provisions of the Settled Land Acts a tenant for life has no power to grant leases beyond the term of his life. It may be suggested that this case comes within s. 7 of the Act of 1890; but, having regard to the definition of a "fine" in s. 2, sub-s. 10 (ii.), of the Act of 1882, and s. 3 of the Act of 1890, s. 7 cannot apply. If the payment is to be regarded as a fine, it should have been paid to the trustees. Under the Act of 1882 a tenant for life may contract to grant a lease, where there is no fine, without the consent of the trustees; but if a fine is paid notice to the trustees is necessary. The lease is bad unless the money is paid to the trustees. Good faith on the part of the tenant for life and the lessee is essential, and here it did not exist: Settled Land Act, 1882, ss. 2 (7) and (9), 6, 7 (2), 21, 22, 38, 39, 40, 41, 42, 45, 53, 54; Settled Land Act, 1884, ss. 3, 4; Duke of Marlborough v. Sartoris (1); Hatten v. Russell (2); Mogridge v. Clapp (3); Hughes v. Fanagan (4); Dowager Duchess of Sutherland v. Duke of Sutherland. (5) Moreover, it cannot be said that the lease was granted at (1) (1886) 32 Ch. D. 616. (3) [1892] 3 Ch. 382, 390. (5) [1893] 3 Ch. 169. the "best rent" because the lessor got something from the STIRLING J. lessee for himself: Sugden on Powers, 8th ed. 785; Dyas v. Cruise (1); Doe v. Radcliffe. (2) Hastings, Q.C., and Micklem, for the defendant. Dealing with the case first on the footing of the payment being treated as a fine, the fact of its having been paid to the wrong person, i.e., to the tenant for life instead of the trustees, does not avoid the transaction altogether. The lessee may be liable to pay it over again: Mogridge v. Clapp. (3) The utmost that the remaindermen can say is, that they have been damnified to the extent of 217., which the defendant is willing to pay over again to the trustees. But supposing it cannot be treated as a fine, the defendant has acted bonâ fide, and there is no suggestion that any higher rent could have been obtained for the property. [STIRLING J. Can a lease by a trustee, coupled with the receipt by him of a bribe from the lessee, stand as against the beneficiaries?] Yes, if they are not damnified. Duke of Marlborough v. Sartoris (4) and Hatten v. Russell (5) were both actions for specific performance, and the plaintiffs had not complied with the requirements of the statute. Different considerations apply to a case of setting aside a transaction. In Mogridge v. Clapp (3) the point was whether it was a fair thing as between tenant for life and remainderman. Here, the interests of the remaindermen will not be prejudiced. That case is in favour of the defendant. The decision in Hughes v. Fanagan (6) would have been different if the Court of Appeal in Ireland had had the advantage of the opinion of the Lords Justices in Mogridge v. Clapp. (3) It does not, however, apply to the present case. The Duchess of Sutherland's Case (7) was very special. Romer J. treated the whole transaction as a sham. Here, the lease was intended to operate, and did operate, at once. (1) (1845) 2 J. & Lat. 460, 482. (4) 32 Ch. D. 616. (7) [1893] 3 Ch. 169. 1896 CHANDLER V. BRADLEY. STIRLING J. If there has been a breach of trust, then the defendant, at the most, is only liable to make good to the beneficiaries what they have lost. 1896 CHANDLER v. BRADLEY. Grosvenor Woods, Q.C., in reply. This is a lease granted under a power, and the defendant must shew that it was validly granted. I submit that it was a fraud upon the power. [STIRLING J. Treating the improper payment as a fine, are you entitled to more than payment of the amount of the fine to the trustees?] That is not the true view of the case, having regard to the want of bona fides. If it were a case of purchase the transaction clearly could not be upheld, having regard to what was said in Mogridge v. Clapp. (1) The fact of the lessee having laid out money on the premises gives him no equity as against the remaindermen. The plaintiffs are entitled to have the lease set aside, delivery of possession of the premises, and mesne profits on the basis of the rent reserved. [He also referred to Tildesley v. Harper. (2)] Cur. adv. vult. 1896. Dec. 12. STIRLING J. (after stating the facts) :—First, what was the nature of this payment of twenty guineas? I think it was a payment to an impecunious man, intended for his personal benefit, and made with the view of inducing him to execute the lease. Secondly, does the law permit such a payment? By s. 53 of the Settled Land Act, 1882, a tenant for life, in exercising any power under the Act, is to have regard to the interest of all parties entitled under the settlement, and is, in relation to the exercise thereof by him, to be deemed to be in the position and to have the duties and liabilities of a trustee for those parties. In this transaction, therefore, James Chandler was in the position of a trustee for the other beneficiaries under the will, and subject to all the liabilities of a trustee. No rule is clearer than that a trustee may not derive a personal benefit from his (2) (1878) 7 Ch. D. 403. (1) [1892] 3 Ch. 382, 395. |